but that is the question, how it would be enforced. sunny hostin on the case, thank you very much. and that is it for me. i'm brooke baldwin in atlanta. time to turn things over to my colleague in washington. wolf blitzer, "the situation room" starts right now. >> thanks very much. president obama promises republicans he'll take heat from his own party to cut a deal on raising the debt limit. this hour, the hard bargaining in public and in private as the clock tick, ticks, ticks towards a possible financial crisis. also, "the news of the world" folds. but the hacking scandal tainting rupert murdoch's media empire keep exploding. two more murdoch newspapers now accused of trying to tap into the personal information of a former british prime minister. and pakistan's reaction to news that the united states government is cutting millions of dollars in military aid. i'll talk to the country's ambassador to the united states about the growing tension and the impact on the war on terror.

i'm wolf blitzer. you're in "the situation room." the federal debt is soaring high or above the limit almost by the second. and president obama is vowing to hold daily negotiations to raise the ceiling if that's what it takes. another round of talks broke up just a little while ago without repeat any break through. with 22 days left the president says he won't accept the stop gap plan to prevent america from defaulting on its debts. he used a news conference this morning to challenge both parties and to lay down some markers. >> i will not sign a 30-day or a 60-day or a 90-day extension. that's just not an acceptable approach. and if we think it's going to be hard, if we think it's hard now, imagine how these guys are going to be thinking six months from now in the middle of election

season when they're all up. it's not going to get easier. it's going to get harder. so we might as well do it now. pull off the band-aid. eat our peas. >> all right, let's bring in our congressional correspondent, kate baldwin. we heard from the house speaker john boehner just before he went back to the bargaining table. update us on the very latest, because the stakes right now are critical. >> the stakes right now are very high, wolf. another day of debt talks and republicans really seem more dug in than ever on the key issue of taxes. as you very well know, as the country ticks closer to this debt ceiling deadline. >> all right, guys. this is the same shot you had yesterday except we're wearing ties today. >> reporter: on a pivotal day in the debt negotiations, republican house speaker john boehner insisted republicans are not to blame for the impasse. president obama and the democrats are. >> i want to do what i think is

in the best interest of the country, but it takes two to tango and they're not there yet. >> reporter: in a hastily scheduled press conference, speaker boehner laid out what in his view the stalemate boils down to. >> the president continues to insist on raising taxes and they're just not serious enough about fundamental entitlement reform to solve the problem for the near to interimmediate future. >> just days ago, talks between boehner and president obama centered on a possible $4 trillion grand bargain including, cnn was told, significant tax revenue. but boehner abruptly rejected that idea. his turnaround comes amid intensifying pressure from fellow republicans, cliending the number two house gop leader, eric cantor. cantor all along has pulled for a smaller debt package of mostly spending cuts but rejected speculation there's a split

between the two republican leefrds. but the pressure was evident as many rank and file republicans remain adamant they will have not support anything amounting to a tax increase. >> i don't care if we call it expenditures in our tax code, revenue, what they are, our taxes on our job creators. and our job creators have responded by not creating jobs. and others are angry negotiations are happening behind closed doors. accusing congressional leaders of back room dealing. >> as a congressman, why should i be forced to peruse cable stations and blog sites for information on the discussions? and then be asked to vote for the deal when i have in input and no time to know even what's in it? >> reporter: now today' meeting at the white house lasted about an hour and 45 minutes. congressional sources tell cnn there were no break throughs in

this talk, but another source, congressional source told me the focus of these talks was on the elements of the biden-led talks that went on for weeks and eventually fell apart. but that was the focus of today's meeting. they'll report back again tomorrow to try again, to reach a compromise and we're told that meeting tomorrow, wolf, will start at 3:45. >> the biden negotiation had about a $2 trillion, $2.5 trillion price tag in terms of budget cuts, budget reduction, deficit reduction, as opposeded to the $4 trillion-plus number the president was ready to go forward. he was even willing, as you know, to put medicare and social security on the table to the deep irritation of so many democrats. what's been the reaction from the democrats to the president's willingness to even raise those issues of medicare and social security cuts? >>ful who, as early as late last week, we were hearing strong pushback from rank and file democrats, saying that, the more liberal elements of the democratic party saying the fact

that have the idea that social security was on the table was something that they absolutely could not agree to. one person saying social security is a covenant they have with many americans that they cannot break. the idea of any concept of cuts to medicare benefits has angered many, many democrats. but i'll tell you, there seems to be, at least they're trying to make a distinction, wolf, between changes to medicare and cuts to medicare benefits. that seems to be up to interpretation and that's something that we need to look further into. >> we'll see if anything happens on that front. >> thanks very much, kate baldwin. let's check in with jack. i've been saying all along, the stakes really are significant. >> it's something to watch, isn't it? ordinarily they can get away with politics on this stuff. but the reality of this particular issue is ominous. and it will be interesting to see when those two worlds actually collide. meanwhile, other stuff, secretary of the treasury, out with an ominous warning for the

american people. it's going to take a while for the economic recovery to feel like a recovery. and for a lot of people it's going to be, quote, harder than anything they've experienced in thag lifetime. for some time to come, unquote. timothy geithner made those comments on "meet the press" in the wake of an outright ugly jobs report in the month of june. the u.s. economy added $18,000 jobs last month. just dismal. the unemployment rate went up to 9.2%. not encouraging at all. particularly if you're one of the more than 14 million americans who are jobless in this country right now. millions of jobs don't exist here anymore. they've been sent overseas where labor costs are much less. meaning corporate profits are much higher. but what about the country? there are 4.6 unemployed americans for every job opening out there, according to the labor department. in some states it's even worse.

in arizona, ten job seekers for every job opening. what's more, nearly 20% of all personal income in this country is now provided by the government in the form of jobless benefit, social security, food stamps, welfare and other programs. the great recession officially ended in june 2009, but many americans haven't gotten back on their feet. i guess they didn't get the news. they can't find jobs, they can't get work. job growth has been slower since then than after any recession since the great depression. and for a lot of americans, average folk, times rp very, very tough. here's the question. treasury secretary tim geithner says hard times will continue for some time to come. do you think he's right? go to cnn.com/caffertyfile to post a comment on my blog. we got a new paradigm, i think, wolf. it's a different world. >> because even if it's 9.2%, the official unemployment rate,

people who are underemployed could go up to 15, 17, 18%. somebody making $70,000 a year, they lose their job, but in order to put food on the table, they accept a job for $30,000 a year, they're considered fully employed, but they're certainly not making what they used to make. >> no, it's a different world. >> all right, jack, thanks very much. let's turn to iraq right now. leon panetta is putting the country's government on notice in the wake of deadly new attacks on troops. what's going on here? >> the new defense secretary is making -- is waste nothing time really making it known that he's going to be a very forceful presence. very blunt talk during his first trip to iraq as the new defense secretary. on his first trip as defense secretary, leon panetta delivered a blunt message to iraqi officials. either you go after iran-backed militias or we will.

>> in june, we lost a hell of a lot of americans as a result of those attacks. and we cannot just stand back and allow this to happen. here's why he's so upset. they haven't seen that level of bloodshed in two years. >> my first responsibility as secretary of defense, the first responsibility of your commanders is to make damn sure that we do everything necessary to protect you. and we are going to do that. >> u.s. fishes display their evidence for the spike in violence. panetta and other officials accused iran of supplying deadly new weapons to militias in iraq. improvise rocket-assisted mor r mortars or irams, explosives shot by rockets.

>> i would like for iraq to exert more of an effort to go after those extremists that are making use of these weapons. >> but the iranian-backed are shiite muslims. iraqi leaders are more comfortable taking on sunni muslim extremists. neither of which is where american troops -- >> so i want to assure you that -- >> so again, one of the things that secretary panetta also pushed the iraqis on was when u.s. troops will actually leave iraq. he not only has a different style than his predecessor, secretary bob gates, but he also delivered that message somewhat differently. whereas gates really seemed to reach out to the iraqis to say he want to stay, we will stay,

we will stay if we are asked. secretary panetta was a little more reserved on that. he even pressed iraq to make up his mind whether he wants the u.s. to stay or go. he says there has to be deploims scheduled. he said iraq needs to hurry up and make up its mind whether it really wants the u.s. to 125i passed the deadline of december 31. >> is anyone talking at the pentagon, chris, about the fact that iraq now is a major oil exporting country? once again, they're taking in a lot of money. if the u.s. decides to keep 10,000, 15,000 troops beyond the end of this year, are the iraqis ready to foot the bill and let the u.s. taxpayers off the hook to pay for that deployment of thousands of u.s. soldiers in iraq? >> that would be a very, very interesting development, wolf. it would sort of be the flip side of what we're doing in pakistan. pakistan puts 100,000 troops on the border to go after

insurgents. and we pay them about $300 million. so this would be the sort of flip side of that. the iraqis paying the u.s. to stay. but i haven't heard anyone talk seriously about that yet. of course, with the economy, the debt crisis, the financial situation in the u.s. being what it is today, i don't think any option is off the table. >> i think there's going to be a lot of resistance on capitol hill to u.s. tax pairs paying for it. but we'll see what happens on that front. check it out for us. let us know if you hear anyone at the pentagon talking about iraq coming up with the cash to pay for an extra deployment of american troops. i'll ask the former british prime minister tony blair if he knew when he was in office and

whether he was personally hacked. and the obama administration responding to an attack on the united states embassy in damascus with its strongest condemnation yet of syria's president. i'm robert shapiro. over a million people have discovered how easy it is to use legalzoom for important legal documents. so start your business, protect your family, launch your dreams. at legalzoom.com we put the law on your side. from "i like you." "i really like you." "i love you." "i will always love you." and sometimes a gift says, "you mean more to me than anything else in the world." life insurance from new york life ensures your loved ones will always be taken care of, with 166 years of financial strength -- it's the most selfless gift you can give. new york life. the company you keep.

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>> let's get into the scandal that's digging deeper and deerp into the rupert murdoch hacking allegation. a lot of people in britain may bh saying it's just the tip of the iceberg. two more murdoch newspapers are now being implicated by a former british prime minister. what are the latest allegations, becky, out there today. >> it's quite remarkable. if rupert murdoch thought he was going to draw a line under this by jetting in this weekend and closing down "the news of the world" he got another thing coming today. three strands to this story. and if you blinked, wolf, let me tell you, you missed part of this story today. the most of the important,

probably coming from the office of gordon brown, the former prime minister. allegations that other papers in the news international stable, and of course "the news of the world" was part of that stable, may have illegally blogged information on him and on his family. it was a tweet from his wife today saying so sad to learn all about my family's privacy is very personal. he's not saying he was hacked into as one paper reports. what he is saying is that journalists and/or private investigators from the sun newspaper and or the sunday times newspaper, and that's a very respected sunday newspaper here in the uk, tried to, and i quote, blag information from his banks, his accounts and indeed tried to get information on one of his children. that child has cystic fibrosis. and we're told the only reason the browns knew about this was somebody from the newspaper rang them to say we believe your

child has cystic fibrosis. there's a lot going on. "news international said please don't do any more reporting on this and any information you have, wherever it's coming from, they say, please let them have that information because there's an ongoing investigation. this is a story that's only raising his head now about gordon brown. >> he like so many other british politicians were scared by retaliation by these tabloids and media empire, if you will. >> of. >> and that is the great unanswered question. who was scared of whom at this point. many people in the uk will suggest that rupert murdoch and his ceo at news international, former editor of "news of the

world" they really wielded so much power that politicians both of the former ruling labor party here in the uk and now the current administration, the conservative party have cozied up to these guys way too much. and there is talk and allegations now that really things might have come out in the past about -- which might have helped investigations which are ongoing by the met police at the time never did. wolf? >> we'll have more about the stories about the rm noer eprime minister and his wife. coming up, an interview with tony blair. the u.s. is now holding $800 million in aid to pakistan. is there a deepening rift in the wake of bin laden's death? i'll speak to the pakistani

ambassador to the united states. that's coming up. plus, how did a stun gun end up on a jetblue airplane? we have details.

new evidence of just how much relations with pakistan has deteriorated. the obama administration now confirming it's holding $800 million in military aid to pakistan. >> welcome back to "the situation room." >> thank you for inviting many e. >> this crisis, and i think it's

fair to say there's a crisis in pakistani-u.s. relations. pakistan withholding $800 million in promised military aid to pakistan. the zus not happy with what you're doing. what do you do about it? >> first old all, i don't think that's a correct characterization. it includes $300 million in reimbursements that have just been slowed down. we haven't received a reimbursement since december 2010. so basically, it's just something that's already slow, having been slowed down more. the fact is that -- >> are you saying this is not a big deal? $800 million of aids has been suspended. >> both sides are working together on a number of things and pakistan is not happy with the pace of delivery of assistance. americans are not happy with the pace of delivery of certain deliverables from pakistan. it happens sometimes. right now because pakistan is a fledgling democracy and everything that happens there hits the media and there's an american domestic political context in which everything becomes an issue because of the

way people react to your administration. this has become -- >> the reaction in pakistan to the u.s. decision to suspend at least for now $800 million in promised aid, a spokesman for the pakistani military saying in the past, we have not been dependent -- we have not been dependent on any external support for these operations. and they will. >> in 1999 there was no aid relationship. even though the u.s. and pakistan continued to work together albeit in a limited manner. it's not a good idea. it insults the people of pakistan. >> $800 million is a lot of money that can be used to build schools here in the united states.

>> the format of this discussion doesn't allow me to give you a breakdown of that $800 million, how they come up with that figure. we can't have a dialogue that's just aid centered. secondly, the united states needs pakistan for a stable afghanistan and pakistan needs the united states to beat terrorism, which we consider to be a menace for our own people. we need to work together and both sides are working together. the only problem is whenever there's a disagreement or the pace of things, it always becomes a much bigger story. my understanding is that the united states government is continuing with civilian assistance to pakistan. >> but military is a different matter. >> which as you know is more than $1 billion in promises. . >> let's talk about what's deeply irritated u.s. officials. i know this because they' told me this, that on a couple of occasions at least they gave intelligence information top your government about terrorists building bombs, secret locati locations. within a few days, when your troops went there to do something about it, all the folks were gone.

all the bad guys -- somebody tipped off the bad guys about the information. >> the important thing is that the troops went there to take action. >> but it was too late. >> previously, we always heard pakistan is not taking action. here's the problem. when pakistan takes action -- >> but they take action after somebody tipped off the bad guy ps . >> there is no evidence that anybody tipped anybody off. what we need to do -- and that's how governments function. they need to talk to each other. and we are talking to each other at every level. we have an understanding that we will solve these problems together. >> you know u.s. officials don't necessarily believe it's a coincidence that by the time your forces reach those locations, the bad guys were gone. >> golf, my point is that you can -- u.s. officials can say anything behind my back. >> they can say it publicly, basically. no one has said it officially. and no one has said it to us, that you deliberately tipped them off. they just said they're concerned this happened. and there's a way to resolve

issues. and that's a way we're all working on. what has happened to the u.s.-pakistan relationship in my opinion is that everybody's got an opinion on it. and when everybody has an opinion, there are television talk shows in pakistan. there are your evening shows every time, everybody talks about it. in private, the u.s. officials and pakistani officials are working things aout. in public, everything negative gets amplified. >> here's something that's very negative and caused a huge uproar in pakistan. and there's a huge journalistic in pakistan. shahzad was brutally beaten and killed. elements of the pakistani government are accused of being involved in the killing of this courageous journalist in pakistan. >> please read the transcript of

what he said. he said, i have read, i have heard. he never said -- >> he says he had reason to believe. >> he has reason to believe -- >> that's a pretty strong statement from the chairman of the joint chiefs. >> and the government of pakistan has appointed a supreme court judge no less. you can not put a nation or its ghovt or its state machinery on trial through newspaper articles. if there is going to be -- >> are you going to suspect this young journalist -- >> all i'm going to say is once there's a commission of inquiry, if the u.s. side has any intelligence on the 345er9, they need to provide it to that inquiry. >> here's the chain of the events. this is a journalist writing critical articles of the isi, your intelligence service and then all of a sudden, two days after a major article appears, he disappears and his body is later found tortured. >> if something like that happened in another country and there wasn't a kind of political environment about that country

that exists right now here, somebody would have staid, it's a conspiracy theory. let us let the commission of inquiry insquire into the matter. pakistan has a history. >> there are issues that need to be resolved. but they will be resolved over time. holding a gun to our heads, saying that this is going to be about breaking of ties or cutting off of aid, et cetera, is not con deuce i. and senior american officials understand that. the u.s. state department has said today that we are working towards a cooperative relationship. my only request is that the bhern media also needs to understand that diplomacy takes its course and there's a time for diplomacy and a manner of diplomacy. screaming and shouting and putting a nation out in the dark

is not the way forward. >> the obama administration meanwhile is warning syria that it had better protect the united states embassy in damascus from violence. there was an attack on the u.s. embassy. and a stern message for the president of syria, bashar al-assad. boy, i'm glad we got aflac huh. aflac! oh, i've just got major medical... major medical. ...but it helps pay the doctors. pays the doctors, boyyy! [ quack ] oh yeah? what about your family? ♪ we added aflac, so we get cash! it's like our safety net... ♪ to help with the mortgage or whatever we need! so my family doesn't feel the pain too. ha! [ male announcer ] help protect your family at aflac.com. [ pigeons ] heyyy! hooo!!!

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an extended mission to space shuttle atlantis. what's going on here? >> well, wolf, nasa says the mission is being extended one day, meaning it will now return to earth july 21. plans have been made the additional day if supplies allowed. nasa is also tweeting that atlantis' critical heat shield will not require any focused inspection. the shuttle makes its final launch to space friday. and first lady michelle obama and hillary clinton and former president bill clinton will be

among the dignitaries attending tomorrow's memorial service, former first lady betty ford. the service is one of two being held this week. ford co-founded the legendary betty ford treatment center for addicti addiction. she died friday at the age of 93. and at least 55 people are dead, dozens missing after a ship sank in russia. authorities say the bulgaria, which went down yesterday was overloaded and didn't have a license to transport passengers. russian president dmitry medvedev has ordered an investigation into the accident. he's declaring tomorrow a day of mourning for the victims. and authorities are trying to determine how a stun gun inded up on a jetblue airplane. crews cleaning the aircraft found it in a seat back pocket. officials say the flight originated in boston but made several other stops that day. the fbi is investigating, but does not suspect it is part of any sort of attack. wolf? >> all right, deb, thank very

much. it's being called a mob attack on the u.s. embassy in syria. it's prompting harsh new words from top officials in the obama administration about the legitimacy of syria's president. it flows with clean water. it makes its skyline greener and its population healthier. all to become the kind of city people want to live and work in. somewhere in america, we've already answered some of the nation's toughest questions. and the over sixty thousand people of siemens are ready to do it again. siemens. answers. handle more than 165 billion letters and packages a year. that's about 34 million pounds of mail every day. ever wonder what this costs you as a taxpayer? millions? tens of millions? hundreds of millions? not a single cent. the united states postal service doesn't run on your tax dollars. it's funded solely by stamps and postage.

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just a little while ago, the secretary of state hillary clinton condemned the syrian government for failing to protect the united states embassy and she offered her most serious remarks yet about the syrian president. >> from my perspective, eh has lost legitimacy, he has failed to deliver on the promise he's made. he has sought and accepted aids from the iranians as to how to oppress his own people. and there's a laundry list of actions that have been certainly concerning. >> all right, arwar, what do we know about the people who attacked the u.s. embassy in damasc

damascus? >> well, the state department is describing them as being thugs numbering around 300, saying they were perhaps incited by state run syrian intelligence. they are not saying anything at this point. but most certainly, it would appear as if this demonstration in front of the u.s. embassy also taking place in front of the french embassy, coming about as a direct reaction to a trip taken by both ambassadors last week. the syrian government has really been quite voe ckabcal by how ut was by that trip, saying it was taken without proper authorization. the minister of the interior accused the u.s. ambassador of meeting with saboteurs and inciting the demonstrations. and the government as well as its supporters have been pointing to this trip taken by the two ambassadors as being direct evidence of how foreign western countries, namely the united states and france are interfering in syria's internal

affairs, deliberately trying to destabilize this regime. >> we know the syrian government has a responsibility to protect all foreign embassies in damascus. what have is the evidence, though, that the syrian government may have been behind this attack on the embassy? >> well, there's no direct evidence that the syrian government was directly behind this attack? the u.s. has, however, been very critical of the syrian security forces, saying that they were slow in responding. they appear to be sitting back watching while anti-u.s. demonstrations take place, allowing those to go forward. most certainly, if anything, we do know this is a regime, when it choose to do so does have the

capability to clamp double play on demonstrations fairly quickly and fairly violently, wolf. >> you're there back in damascus for what the government is calling a national dialogue conference. but is it fair to say that there are any real opposition figures participating in this so-called dialogue? >> well, wolf, most of the prominent opposition figures have boycotted, and there's absolutely no representation of the street demonstrators. those opposition figures who were present were, in fact, voizing the demands of those who were absent. they were saying that for this type of dialogue to even begin to succeed, the violence against demonstrators has to stop. they were very vocally critical of the excessive use of force by the government against these anti-government demonstrators. but there wasn't any real opposition representation. and even though the government

billing this, there is a severe trust deficit that exists between the government and the opposition. the opposition quite simply does not believe that the regime intends to reform. and there's only one way that they can prove that. and that is if they stop shooting peaceful demonstrators. >> the former british prime minister has very strong words for bashar al-assad. he ba he basically says it's time for him to go away. michelle bachmann, feeling some new heat from her opponents on the campaign trail. this is a sign she's now emerging as one of the toughest competitors in the race for the white house. ands an escalating hacking scandal. just how easy is it to break into a phone and check your voice mail? we'll show you. h, your seat goo? got the mirrors all adjusted? you can see everything ok?

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>> let's go right to our strategy session. the republican strategist mary

matlin and donna brazzil. tim pawlenty is really getting tough on michele bachmann, emerging as one of the front-runn front-runners. listen to what pawlenty said on "meet the press" yesterday. >> i like congressman bachmann. i campaigned for her, i respect her, but her record for accomplishment in congress is nonexistent. we're not looking for folks who, you know, just have speech ca capabilitie capabilities. we're looking for people who can drive to conclusion. aye done that, she hasn't. >> he doubled down this morning on fox going after her in similar words. her record in congress, mary, nonexistent. are you surprised that he's getting this tough? >> no, he has to.

shi is besting h im. she's obviously besting him in the poles so h ehas no choice. he's got to follow up on the shot, lest he confirm that the john king debate was his constitution, which i don't think it is. the president obama's health care plan nationally, when he had a chance to back that up, he sort of wimped out which obviously hurt him because he seemed to maybe too nice of after guy. >> about 30 days to go, tim pawlenty knows that michelle bachmann is the person to beat.

she's leading the polls in iowa. she was really rallying the faithful. i keep wanting to say michelle obama. god bless michelle obama, but michele bachmann right now has organization, she has money and a lot of energy, an she's leading the polls in the hawkeye state. >> also asked her campaign strategist, ed rollins, our former cnn contributor, former ronald reagan political director, ran mike huckabee's campaign four years ago. obviously put together a good team for michele bachmann, and she's doing very well right now. but let's talk, mary, about sarah palin for a moment. she's on the cover of "newsweek" magazine. in the interview with "newsweek" she says this. i believe that i can win a national election. the people of america are desperate for positive change and deserving of positive change to get us off this wrong track.

i'm not so egotistical as to believe that it has to be me or it can only be me to turn things around, but i do believe that i can win. do you believe, mary matalin, and you're a great republican strategist, you know all the players out there. is sarah palin getting ready to jump into this race? >> there are more people today who believe that that is the case, but she always has by necessity and unique skill sets, she has her own temp plates and own tactics. she can start later and catch up with everyone, and i -- i can't believe -- i feel it more today than i did last week, that she probably is going to get in. >> yeah. that's pretty amazing. what do you think, donna? >> well, i think sarah palin clearly wants to run. bristol, her daughter had said something to the effect that her mother has made up her mind, but sarah palin is, of course, waiting for that moment where she can tweet us and let us know

all about it. look, i think she's in it until another deal comes up, and maybe she will step aside, but sarah palin has to deal with some pretty tough issues. i think she will have the money. i think she will pull together the organization, but she has high disapproval ratings among independents and one-third of republican voters also disapprove of her performance. right now in the state of alaska, sarah palin's disapproval rating is almost 48%, so even in her home state of alaska she's having a tough time. she has to show more discipline. she has to demonstrate that she can pull together a good staff. more importantly, she has to demonstrate that she's willing to listen to other people as well. >> what do you think, mary? >> i think all of what donna said is true, but what's also true, and everybody is underestimating, is the weakness of barack obama, so she's not running in a vacuum. she's not running for the governor of alaska, and when you win, you win, and can yyou cann underestimate the anger amongst

i inddents and the absolute commitment of conservatives to beat barack obama, and they are spread out now, but when we have a nominee, you're going to see a kind of cohesion and a fight the likes of which we haven't seen since 1980. >> you know what, mary, it's true that conservatives dislike the president, but what is also true, the country would really like to see us come together to get this debt situation under control, to look long term and not just the next election but to look at how we sustain our economy in the face of other threats that we -- we have as americans. but barack obama is going to do very well next year. the republicans need to deal with the weaknesses that they see in their own candidates, mitt romney, the front-runner, when has flip-flopped more than anybody i've seen, tim pawlenty who can't seem to get his gas and his tank to really fuel a major campaign in iowa, but right now the republicans are really disappointed with the set

of candidates that they have before them and that's why sarah palin is looking at coming in through the back door pretty soon. >> but the headline right now, at least over the past few minutes, mary matalin is open -- is suggesting that sarah palin is seriously considering a run for the white house. i'm not exaggerating, right, mary? >> i think she's giving signals that she's -- more than she has in the past. this is not about liking or not liking barack obama. this is not about the president. he continues to enjoy the likability numbers. he -- nobody likes his policy, not just conservatives. independents, and the debt ceiling argument right now is a good example to focus on the differences between the parties and sarah can articulate those differences as well as anybody in the field. >> when a deal -- if a better deal comes up, mary, all -- she will drop it and she will go back to selling books and tweeting. >> we'll see what she does, but she's on the cover of "newsweek" magazine right now, guys.

thanks very much. and as we've been reporting, president obama is pushing lawmakers to try to reach a deal. stand by for more on his strategy to raise the debt limit and whether default is really even an option. and two more newspapers are being sucked into the scandal that shut down a british tabloid. i'll ask the former british prime minister tony blair whether he and his family ever had their phones hacked. [ male announcer ] introducing the ultimate business phone -- t the motorola expert from sprint. its powerful tools help you work faster and smarter so you can get back to playing "angry birds." it lets you access business forms on the go, fire off e-mails with the qwerty keypad, and work securely around the world so you can get back to playing "angry birds." it's the android-powered phone that mixes business with pleasure.

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liberty mutual auto insurance -- responsibility. what's your policy? personal pricing now on brakes. tell us what you want to pay. we do our best to make that work. deal! my money. my choice. my meineke. back is back with "the cafferty file." >> treasury secretary tim geithner said hard times in this country will continue for a time to come. is he right? >> he's right, jack. american corporations are sitting on $2 trillion in profits they made made from laying people off and sending jobs overseas. unless you're a ceo or major stockholder you're either doing the work of three people or you're unemployed. hard times indeed. pete writes even a broken clock is right twice a day.

finally it's geithner's turn. actually it's a very disingenuous forecast by geithner given he and his peers like those in the financial sector and on wall street have done very well over the last two years and will continue to do so. 80% or more of our citizens are barely treading water or have already drowned, but as long as the wealthy and the special interests are safe in their yachts, who cares. john writes from louisiana, he's right, and it's going to get a hell of a lot worse if the republicans let the country default so the rich can get richer. yes, it's going to take a long time for the skill sets to match the new reality of fewer jobs. of course he's right. nobody mentions our lousy trade deals or until they are revised or revoked jobs will continue to be outsourced by american companies. why pay an american worker a living wage and you're not penalized for having work done for pennies by foreign

employees? it's not just manufacturing either. your taxes might be done in india next to the office of the radiologist who reads your x-ray, and you never know. and from texas, treasury secretary geithner is hardly credible. none of his policies worked in the past. why would i believe him now? fur want to read more on this, go to my blog, c cnn.com/caffertyfile. >> jack, thank you. you're in "the situation room." happening right now. one former british prime minister among the alleged targets in britain's exploding hacking scandal. we're going into it with a former prime minister, tony blair. how easy is it to hack a cell phone? and a rampage inside the syrian compound, and added pressure and the change of tone from president obama saying he's ready to cut a deal with the republicans on raising the debt limit as the clock ticks towards

a possible u.s. default. we want to welcome our viewers in the united states and around the world. breaking news, political headlines, all straight ahead. i'm wolf blitzer. you're in "the situation room." the hacking scandal that killed one of britain's biggest newspapers is spreading and spreading and now reaching the highest levels of the government and rupert murdoch's media empire. murdoch himself is now trying to contain this exploding scandal. we have in-depth coverage for you beginning now with the latest. what is the latest? >> reporter: well, the latest, wolf, is that former british prime minister gordon brown is just the latest big name added to a long list of phone-hacking victims, numbering as many as 4,000 by most accounts. this is a scandal that's rocked

rupert murdoch's media empire and now includes alleged payments to police officers for information about well-known members of british society, including the royal family. the allegations of illegal hacking by news corporation journalists no go far beyond the now closed "news of the world." "the guardian" newspaper says britain's former prime minister gordon brown's phone and computer were harked by another company owned by rupert murdoch. some 9/11 victims in the united states may also have had their phones hacked, and the bbc reporter that a "news of the world" royal reporter had requisitioned cash to pay police guarding britain's royal family for the royals' private phone numbers. now the paper's former ed toyed rebekah brooks is expected to be questioned by police. >> if she had a shred of decency in her, she would have resigned if only because phones were hacked and the family was

believed the family was still arrived. >> reporter: the mother and significance ter of the murdered teen was met by british lawmakers on monday and said they are still waiting to hear from the newspaper. >> there hasn't been an apology from rupert or james murdoch. >> reporter: murdoch arrived in london on sunday and says brooks, now ceo of news international, is his priority, but his $12 billion bid for british broadcaster bskyb is now in jeopardy. >> i don't know whether this will happen. the labor party is saying let's delay this, and, you know, the stock is plunging. >> right. >> so it -- it could be a huge blow to news corp. >> reporter: well, it is primarily a political business story but essentially a personal one, and tonight gordon brown, the former british prime minister spokesman issued a statement saying, quote, gordon brown has now been informed of the scale of intrusion into his family's life. the family has been shocked by the level of criminality and the unethical means by which

personal details have been obtained. the matter is in police hands. the police have informed mr. brown on glen mulcaire's list and some time ago mr. brown passed all relevant information, mulcaire being a private investigator implicated. there's more revelations expected in the coming days. this story now let threatens to engulf politicians, the public, the police and not to mention the papers themselves. wolf. >> an amazing development, i must say. thanks very much for that. how easy is it to hack into someone's cell phone, including yours? our own brian todd has been investigating. what he discovered raising some serious security concerns for all of us. his report coming up later this hour. the allegation that former british prime minister gordon brown was a target of media hackers is taking the scandal to a whole new level.

i spoke about that in depth just a little while ago with brown's predecessor, the former british prime minister tony blair. let's talk a little bit about this scandal in england right now. it's shocking to me. i've read those tabloids. did you have any idea, a, as prime minister, and, b, since you've left office, of the enormity of what's going on? they seem like a bunch of gangsters over there. >> well, i mean, there's very good journalists out in the uk as well. that shouldn't mean that all british journalism is like that. >> i'm not saying that all of the british journalism was like that. the excesses we're reading about, were you stunned by this? >> if i have to be frank about it, i think most -- we've learned to live with a certain standard of behavior, and i think the reason why it's important now as a result of what's happened to open the whole thing up and there will be an inquiry in which we can look at the relationship between media and people in public life

and politics and so on. i think there's a whole set of aspects of this that need to be looked at, should be looked at because in the end you want a free and vibrant press which is a vital part of a democracy. i think what's really certainly shocked the british people actually has been the -- the absence of just basic standards and the way things are done. >> doesn't look like there were any standards. i mean, they would intimidate politicians in a horrendous way, some of these excesses. you understand that. >> well, you know, i've got a lot of experience dealing with that. >> did they intimidate you? >> i don't know about intimidate me. if you were caught up in a media storm, you certainly knew you were in it? >> did you know how powerful these tabloids were in terms of trying to scare politicians and warning them if you didn't do what they wanted they were going to go after you? >> well, the media is very powerful in the uk. the media is powerful everywhere. one. things that i think any sensible investigation of this has got to look at and try to do it

dispassionately because the politicians have their point of view, media has their point of view. always going to be an uneasy relationship between the two, never mind back in the uk, but what is important is to realize that in a world of 24-hour a day seven-day media with all of the new technology and with the huge competitiveness there is in the british media, people are desperate to get their stories and -- and, you know, get ahead of the competition. unless you have some sort of framework within which people agree to operate and everyone acknowledges that and abides by, it then you do get a pretty ugly situation. >> but you saw some of the ugliness -- you saw some of the ugliness, and i guess the question is did you investigation what was going on? >> look, one of the -- one of the strange things about this is if all of this had happened, you no, all of this information had comout and people have been aware, in the aware of the specific instances, in other words if this great fury had

happened some years back, then, yes, could you have used that as the opportunity to say let's have a lack at all of this. i think frankly if anyone six months or a year from now said i'm going to have a major inquiry into how the press operates in the uk and the relationship between the media and politicians, would you have found it very difficult. just before i left office, i actually made a speech. this is about furr years ago now, exactly on these issues, describing what i thought the problem was and describing why i thought there had to be a debate, an i have to say it wasn't one of my more successful experiences since, you know, the time, the mood just wasn't for investigating that at all. i think what this has done is it's opened the issue up and let's open it up and lock at it. >> there's a story out there in england that you urged gordon brown, the former prime minister, to hold back in criticizing rupert murdoch and his empire in england because he would come back and slam you if -- if he were to do so. is that story true? >> that is absolutely and categorically untrue. >> what happened? >> well, nothing happened. >> what did you tell gordon

brown? >> i never told him anything. >> you never discussed this issue with him. >> no. the issue for us in the uk has always been as politicians, and this is part of the trouble. you know, you're a political leader. you're in a situation where the media are very powerful, and i think one of the things that my successor david cameron was talking about the other day, which was interesting in a way, is how when you are a major political leader and, you know, you're trying to fight elections, trying to govern the country, you can only communicate in a sense through the medium of the media that exists. i mean, it's a difficult relationship to have, and at times, you know, as i said the other day, i think if i go back over the last decades, you know, i don't think there's a single political leader in britain who wouldn't have felt uncomfortable about the relationship which is a good idea to examine it and then you can see how you put it on a more healthy footing. >> do you have any reason to believe you were hacked, your phone was hacked, your records

were hacked, anything along those lines? >> i don't, but i didn't have a mobile phone when i was prime minister which is probably just as well, but -- but i don't. i keep reading that it's possible that i have been, but i honestly don't know about it. >> i want to read to you one paragraph that jumped out at me in the "new york times" on saturday. it involves your wife. i'll read it to you. this is from the "new york times" on saturday. cherie blair, wife of former prime minister tony blair, was legally tortured in print by the right-leaning "daily mail" because she made no effort to cultivate it and because it was not an admirer of her husband's labour government. in a stream of articles, the mail pertrade her as greedy and profligate and follower of wacky alternative medicine regimes, selecting unflattering fettos to make her look chunky and ill dressed. do you remember the way they tortured her? >> pretty much. >> was that accurate?

>> pretty much. >> and you had to live with that? >> you know, it's a privilege to do the job, and you ended up being pretty robust about these things, but, i mean, the short answer to you is in a way i'm quite surprised how shocked you guys are over here. >> we're pretty shocked about this. >> i'm shocked that you're not shocked. >> you know, i lived lieu it for kind of 15 years at the top of politics, and one of the things i think that's important in this. since -- you no, it's important to say this. politicians are always going to think the media are out to get them, okay, so you've got to leave all of that to one side, even with myself, and in addition people are entitled to their views about political leaders and entitled to list li -- to dislike me or my wife or anyone else. this is not about one group of newspapers or one part of the media or one type of procedure, whether it, you know, in this

case hacking. it's about a whole range of things that need to be looked at so that we -- we understand what's acceptable and what isn't acceptable because in a way what i was trying to say to you earlier is that i think as a result of this over the years, you know, you tolerated what in a sense is intolerable, but you did it because, look, when you're the prime minister, you're running a country. go out there every day and start complaining about the media. you know, the public said, well, that's fine but get on with your job so in a way it's difficult for an existing prime minister, an existing political leader. someone actually in office to have this type of debate, but i think now that that,has happened it may be a thing that in a curious way gives us the opportunity to get a more healthy relationship and where the typess of standards that -- that you guys i think probably do have here, or so i understand, are then assimilated and regarded as natural and

normal back home. >> i hope so. tony player, by the way, is here inworkton trying to jump start middle east peace talks. is it too late? we'll talk about that, the crisis in syria, much more of my interview with the former british prime minister tony blair later here in "the situation room." let's check in with jack cafferty. he's got "the cafferty file." jack? >> am i missing something? aren't we talking about criminal behavior. >> correct. >> that seemed to have been lost on the former prime minister. these people were hacking into personal things, e-mails and computers and cell phones. >> and bribing police officers to get sensitive information. >> well, doesn't that go above and beyond the normal adversarial relationship that exists between the press and the media? i hate to think they were doing this on this side of the atlantic. president obama and congressional leaders from both parties met behind closed doors at the white house this afternoon to discuss a deal on the debt ceiling.

the second time in two days. all parties are still pretty far apart, surprise. republicans and democrats both laying down ultimatums and republicans have said everything is on the table except tax increases. democrats have said they will not agree to a deal based solely on spending cuts. the president has proposed his own deal, a ten-year $4 trillion plan that tilted 4-1 in favor of spending cuts. boehner said that was dead on arrival. the clock is ticking. if they don't reach an agreement by august 2nd, the u.s. could default on some of its loans. that would send stock markets around the world into a swoon. interest rates would shoot sky high, and the dollar would head towards worthless. both sides of the debate know all of this. right now it seems to be a game of chicken, doesn't it? who is going to blink first? but this time, this time, the stakes couldn't be much higher, and it will be interesting to watch. the head-on collision between politics as usual and the reality of financial default.

they are juggling hand grenades here. the president has ruled out signing a short-term extension to the federal debt ceiling, and we're just a few weeks left now the rhetoric more resembles schoolyard trash talk than statesmanship, and if you're not worried about the outcome of all of this, you probably should be. here's the question. how do you see the debt ceiling issue being resolved? go to cnn.com/caffertyfile and post a comment on my blog. wolf? >> thanks, jack. thanks very much. we're going to be hearing from president obama and speaker john boehner, and we're going to get more details on today's talks, where the two sides stand right now in raising the u.s. debt ceiling. also, new details of a damaging attack on the united states embassy in syria. stay with us. you're in "the situation room." ♪

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limits, president obama and leaders are taking on an add urgency. this prompted the president to hold his second news conference just after talks over at the white house. let's go to our white house correspondent jessica yellin who is standing by. what's the very latest that you're hearing, jessica? >> reporter: wolf, the very latest according to my sources during today's meeting republicans laid out for the president a number of cuts they would hike would like to include in the debt deal but it came up well short of the total cut goal that republicans set for themselves and democrats argue that had they can't even get the votes for this deal unless it includes some attempt to raise revenue. after a weekend of deadlock the president made the case he's ready to cut a deal now. >> we might as well do it now. pull off the band-aid. eat our peas.

now is the time to do it. >> reporter: he made it again. >> now is the time to deal with these issues. if not now, when? >> reporter: and again. >> what i've said to them is let's go. >> reporter: but from capitol hill it's clear the president's differences with republicans haven't narrowed. >> the president continues to insist on raising taxes, and they are just not serious enough about fundamental entitlement reform to solve the problem for the near to intermediate future. >> reporter: in this meeting with congressional leaders, one big issue on the table taxes. will republicans relent, either closing loopholes or allowing the bush tax cuts for the wealthiest to expire at the end of 2012? >> i want to be crystal clear. nobody has talked about increasing taxes now. nobody has talked about increasing taxes next year. >> reporter: on the other side of the aisle, another big issue. will democrats relent and agree to changes in entitlement programs, like medicare and

social security? >> the vast majority of democrats on capitol hill would prefer not to have to do anything on entitlements, would prefer frankly not to have to do anything on some of these debt and deficit problems. >> reporter: one compromise the president flatly ruled out, a short-term deal. >> the things that i will not consider are a 30-day or a 60-day or a 90-day or a 180-day temporary stop gap resolution to this problem. >> reporter: now, wolf, the president has called the leaders back for another meeting tomorrow at 3:45 tomorrow afternoon in the white house. he has asked them to come back every single day this week, perhaps next week, until they get a deal done. their marching orders for tomorrow, figure out how they get from 1.7 roughly in spending cuts that they have come up with today about to the 2.4 trillion

that they need for a deal. how do they close that gap? that's what the leaders have to figure out overnight and present the president with tomorrow. whofl? >> if it were easy, it would have been done a long time ago. thanks very much, jessica, for that. let's get analysis with our chief political analyst gloria borger who is here. got to reach a deal, gloria, by august 2nd but the president says no short-term stop gap measures so how do they break that logjam? >> well, let me see. there's got to be a way to do it because they all agree that they have to do this by august 2nd. obviously the issue -- the key issue for the president is the republicans and whether they are going to budge on taxes. take a listen to what the president said today. >> i do not see a path to a deal if they don't budge period. i mean, if the basic proposition is it's my way or the highway, then we're probably not going to get something done because we've got divided government. >> i was speaking were racinior

white house official today who said there may be one way out of this mess, but it would be part of a smaller deal, not the big deal that the president has talked about, an that is closing some of these tax loopholes but also extending the payroll tax cut. that way if you're a republican there are no net tax increases in this, and maybe some of the more conservative republicans would say, okay, under that circumstance we could buy the closing of the loopholes, but, again, wolf, that is only one option that's on the table. many are out there. >> because closing some of those loopholes or eliminating some of those deductions for oil companies and for very very wealthy institutions or individuals, as far as so many republicans and some democrats are concerned. >> right. >> that's seen as a tax increase, but if you combine it with payroll tax cuts and extensions of those, maybe

there's some way you can get around it. but, look, wolf, republicans believe -- many conservative republicans believe there is no compromise on this issue, and you know why? because 230 plus of them took a pledge and said i will not vote to raise taxes. you've got 40 republicans in the senate who have done that, so how will they view a compromise of sorts if it does involve on the one hand closing loopholes? will they consider this a tax increase even if it's combined with some kind of a tax cuts? you know, it's hard to tell. everybody seems to agree, at least the leaders sitting around that table, that the job has to get done. >> as i write in my blog at cnn.com/situationroom, it's a high-stakes game of chicken they are playing right now, but they have to come up with some sort of solution soon. >> but, you know in, a way, wolf, it's almost more than politic right now for the republicans. it's become theological, no new taxes.

if it was just politics, they might have come up with a big deal because in everyone's interest to reduce the deficit and look like they are doing what's right for the company. you've got republican presidential candidates out there saying they are not for a debt limit extension. what do you do when it crosses from politics to kind of theology and the party starts getting narrower on this one particular issue? >> theology, they won't reach a deal. if it's politics, they can reach a deal. >> we'll see. u.s. relations with damascus may be skidding to new lows right now. protesters attack the u.s. embassy in syria for the third time in four days. i'll ask the former british prime minister tony blair what that means for syria's embattled government. [ male announcer ] where'd you get that idea?

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there's widespread damage at the united states embassy in syria where pro-government mobs staged an hour long attack with some demonstrators scaling a fence and managing to get inside the compound. they broke windows and knocked out security cameras and painted graffiti on the walls. our foreign affairs correspondent jill doherty is getting new details for us over at state department. what else are you hearing, jill? >> also a diplomatic side to this, wolf, and that is it's really the furthest that any u.s. official has gone so far. secretary of state hillary clinton saying the president assad has lost legitimacy. that came after the syrian government apparently retaliated for a controversial visit by the u.s. ambassador to a syrian town

last friday that was the scene of a major crackdown on demonstrators. the state department calls it a mob. 300 people attacking the u.s. embassy in damascus, some got over the walls on to the embassy roof. they broke windows, spray painted and knocked out security cameras. meanwhile, two blocks away, another crowd made it over the walls of the ambassador's residence, broke windows, spray painted, threw food. the attacks, the state department charges, appeared to be incited by a syrian tv station heavily influenced by the government, and they came after crowds threw stones, eggs and tomatoes at the embassy over the weekend. the violence appeared to be retaliation for a u.s. ambassador robert ford's provocative visit to the city of hama where he was greeted by anti-government protesters. sunday ford demanded the syrian government protect the embassy and its staff as international

law requires. for secretary of state hillary clinton the attacks against the u.s. embassy were the last straw with syrian president bashar al assad. >> from our perspective he's lost legitimacy. let me also add that if anyone, including president assad, thinks that the united states is secretly hoping the regime will emerge from this turmoil to continue its brutality and repression, they are wrong. president assad is not indispensable, and we have absolutely nothing invested in him remaining in power. now, secretary clinton stopped short of calling for assad to step down, but she also made no secret of the fact that the u.s. does not want him to continue in office. nevertheless, the u.s. continues to say it's up to the syrians themselves to decide whether he stays or whether he goes. wolf?

>> jill dougherty, thank you. the attack in damascus as well as stalled middle east peace talks were also part of my interview with former british prime minister tony blair. can you believe that the regime there apparently authorized hundreds of anti-american protesters storming the u.s. embassy in damascus? >> i'm afraid in a way i can believe it. i mean, i think the regime there is increasingly desperate, but what they have got to understand is that it won't work in the end. the lesson from all around this region is that the less regimes are prepared to engage in a process of evolution, which is seen by the people as legitimate, then in the end they are going to be at risk and probably swept away. >> because you met with the president of syria bashar al assad. should the international community deal with him the way it's been dealing over these past several months with moammar gadhafi of libya? >> it's not possible to take the same action. >> why? >> well, that's a good question, because i think there's no real consent for military action in

respect of syria. i mean, just wouldn't get the same support. >> what about militarily saying you must go? >> i think we're at that stage, frankly. >> i haven't heard the united states government say about bashar al assayed what it's said about moammar gadhafi? >> because i think there's still a residual hope somewhere -- because he's often talked the language of reform and talked the language of major change within his country. the trouble is it never seems to happen and in the end a regime such as the assad regime in syria it's not sustainable. the key thing from all that has happened in the arab spring is to realize if something rationally and logically isn't sustainable, then the fact that it's being temporarily sustained doesn't mean it will carry on being sustained. >> do i hear you say, tony blair, say it's time for bashar al assad to accept down? is that your personal opinion? >> it's not my place but i can't see how it is possible. >> you think he should go? you're tony player, a private

citizen. >> absolutely, and i'm trying to be diplomatic about it. it's not for me to jump ahead of what the present leaders will saying but he's got a choice, and he's had that choice all the way through, and so far at each stage he's failed to make the right choice, and the choice is either to set out a process of genuine constitutional change in this country that will probably end up with a different regime. >> there's no illusions. you don't think he's going to make that real bold gesture for democracy and reform and change? you think it's too late for him? >> i think it is, yeah. >> let's move on and talk a little bit about why you're here in washington. is it too late to get the israeli-palestinian peace process going, because a lot of us who watched this story unfold for many years is pretty depressed right now? >> here it's not too late and actually strangely because of the changes in the region, the convulsions that are happening, change in egypt, changes you say in syria now, there actually is an opportunity if we're smart and intelligent about it to put together a set of principles

that can guide a framework for negotiation. >> will you come up with a blueprint, if you will, to try to jump start these negotiations? >> i'm not sure it's going to be possible to do that right tonight, but we are in the process of discussing how it is you would set up as a framework of principles that would make this a credible negotiation, bring the parties back to the negotiating table, and president obama, when he set out in his speeches here in america a short time ago, the types of principles that would allow us to make progress in this, i think we've got to take that. >> is that the basis -- >> that's got to be the basies. >> what the president said in his state department speech. >> right. >> pre-'67 lines with mutually agreed landmarks. >> the blueprint is to recognize you're not going back to precisely the same borders of '67 because of the changes that have taken place but '67 borders with mutually agreed negotiated swaps is obviously the right way forward, but then you've got security issues.

there are vital issues for both parties and, of course, refugees. >> prime minister, thank you very much. >> thank you. >> how easy would it be for a hacker to get into your cell phone? guess what? it turns out it's a lot easier that so many of us once realized. chloe is 9 months old.

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let's get some more now on the british hacking scandal that spread to the highest levels of the government with former brimts gordon brown now revealed to be among the targets, but it's not just politicians and celebrities who are vulnerable. anyone, anyone with a cell phone, could easily be hacked. our in-depth coverage continues right now with cnn's brian todd. brian, you've been looking into this story because almost everyone probably watching us right now, they have voice mail. they have a cell phone. what is going on? >> well, they call this practice

phreaking your phone, from tapping in to get pass codes and tricking a person's phone to think that a hacker is a subscriber recall we found it surprisingly disturbingly easy to get into a voice mail. for "news of the world" reporters to have allegedly hacked into the voice mail of a murder victim or celebrities or terror victims, experts say they wouldn't have to be experts. >> there are a lot of easy-to-use techniques and freely available tools that can help hackers get access to your phone. >> reporter: in speaking with telecom and cybersecurity experts we picked up three basic techniques hackers can use to get into your voice mail. first, they can dial into your voice mail network, keep trying default pass codes like 1111. >> enter pass code and pound sign. >> 1111. >> log-in incorrect. >> many users are given default pass codes and many users don't change them or change them to

bad pass codes and change them to their birthday, information obtained from facebook. a secretary method for hacking into somebody's voice mail is spoof your phone number to make somebody's voice mail think it's their own phone accessing the voice mail. to do that you can go to a website that lets you get a spoof number. and we're going to do that. we buy a spoof account on spoofcard.com, a legitimate website for pranksters an allows us to call any number we want, making it seem like it's coming from any number we want and from another phone we call a new cell phone disguised as his own number. >> i'm going to ignore this call. >> okay. >> please leave a message. >> hit star. >> you have one unheard message. >> so we were able to hear your voice mails just now, a very simple process if you doyle a series of numbers. >> absolutely right.

>> i have a p.i.n. set up on my voice mail account but if i'm dialing my voice mail account from my phone, i get straight into it. >> reporter: some carriers require you to give a pass code to access your voice mail from your own phone, some don't, making it easier for hackers. a third method to hack into a voice mail. >> call the network operator and pretend to be you and say that they lost your password and that they need to get into your account and they can supply your social security, matter's maiden name and they would have access to your account. >> reporter: you can set a pass code for your account itself so even if a hacker knows your personal information, they don't know the one pass code. experts say you should keep changing your passwords for every account that you have, maybe as often as you change your toothbrush, maybe every few months or so. >> people change their

toothbrush every for you weeks or rich people every few days. >> right. >> what about information you put on facebook or other social media? >> you have to limit yourself to who you accept on your facebook account and the information you put on. it's an absolute gold mine for hackers. it's so easy to -- that information on a facebook and twitter account, things like that. limit it. don't put everything out there and too many people do that all the time. >> thanks very much. good reporting. good advice as well. inside it may look like vegas. outside you're in a florida strip mall. you're going to find out why these street side casinos are now becoming a sure bet for controversy and closure.

luck may be running out for strip malls casinos in florida. police are shutting them down almost as fast as they open. here's cnn money's poppy harlow. >> reporter: welcome to florida? this isn't the vegas strip. it's a strip mall. between barber shops and massage parlors, so-called sweepstakes cafes are popping up across the country.

they have got the markings of a casino. free food, dark rooms. some open 24 hours. >> does it feel like gambling to you a little bit? >> yes. that's what i like about it. >> reporter: but are they casinos? law enforcement thinks so, and they are shutting them down because here in florida only certainly highly regulated operators are allowed to run casinos. >> in our opinion it's clearly gambling. >> reporter: owners say that's not the case. >> it looks like a duck, quacks like a duck and walks like a duck but it's not a duck. >> reporter:? every one you'll find a sign like this. just to give you a sense of how many sweepstakes cafes there are, one right here, two across the street. they would not let us in and around the corner another. here's how the sweepstakes cafes work. they are filled with rec computers were special game computers on them. to play you buy a phone card or internet time. a $20 card gets you $20 worth of play. the cafe owners claim it's not

gambling because the customers are buying a phone card or time on the internet, and the game is just a sweepstakes promotion for the product. but you can still lose money, just like in a slot machine. >> i ended up losing 15 bucks. do most people come to these establishments to use the web. >> no. >> reporter: or are they coming to play? >> they are coming to play the games. >> reporter: we went out to find where all the software comes from. >> i sell the computers pre-loaded with software to businesses that intend to promote their products. >> reporter: don runs world touch gaming and sells thee terminals for 1,500 bucks a pop. >> i get a fraction per entry revealed. >> reporter: making it a lucrative business for software developers and store owners who can bank up to $40,000 a day. it actually says that the total prizes over the next 1,000 entries will total $39.55.

>> reporter: owners call it pre-determination. mat sheen is programmed for specific wins at specific times which is not random which makes it different from a slot machine, but as we found not every place operates their cafes that way, and now many are getting raided by cops. >> they wear with flack suits and come with guns blazing. >> reporter: florida state representative peter nehr actually opened a sweepstakes cafe only to have it shut down two months later. >> it's not a gambling operation. it's a retail business who uses sweepstakes to promote their business. >> reporter: but the sheriff isn't buying them and he's ordering them shut left and right. what games do you like to play? >> the winning one. >> reporter: in pinellas county florida, poppy harlow, cnn money. >> prince william and catherine certainly get a warm welcome and leave with a lasting impression. we're going to talk how the british royals captivated california. [ male announcer ] this...is the network --

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dr. jack, he's got the cafferty file. >> the question this hour is how do you see the debt ceiling issue being resolved. greg in arizona, the question of raising the debt ceiling has been resolved for weeks it will

be raised. the only purpose of these meetings to to dom up with the best way to spin the announce nt so both sides can claim victory about when the reality of spending cuts and tax hikes takes effect. reductions in spending and tax increases are both necessary to reduce the deficit and the debt. that seems rational, which also means it won't happen. pat in michigan. if congress had any sense, and they don't, they would cut all programs by 10% for the foreseeable future. reduction tax deductions on all brackets by 10% of what they are now. let our allies who we pay to be our allies know the faucet is shut off until we get our house in order. have no new programs until the budget is balanced. then when we have a surplus fund social security back to full benefits. we share the burden together or go down in flames together. joe in texas writes it won't be resolved. they'll just increase it, then add more debt.

james writes, i see the debt ceiling, deficit and political folly in general being solved by the american people deciding enough is enough. you'll know that when you see american people doing what the people in the middle east, greece and other countries have already shown the courage to do. the democrats won't cut spending, the republicans are living in some cutesy fantasy world where the rich are forgotten. that if the middle class goes under, so does the wealth of this nation. russ in pennsylvania writes, history knows and shows that congress will just kick the can down the road. at some point that poor can is going to find that said road ends where the precipice begins. we should probably wish that poor can well while we can, as continued spending by government will cost us our own cans as well. if you want to read more on this, go to my blog, cnn.com/caffertyfile. >> see you tomorrow, jack. thank you, jack cafferty with the cafferty file. even the stars were starstruck.

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by an honor guard as he arrives for a four-day visit. in switzerland gymnasts jumped during an event. in england an image of harry potter cut into a cornfield. here the softball team poses after making it into the final four of a tournament. congratulations to dean for a great seend congratulations to nbc's local affiliate wrc for winning the tournament. hot shots, pictures coming in from around the world. the duke and duchess of cambridge are now back home in the uk after captivating california and canada. cnn's royal correspondent max foster reports on their triumphant tour. >> reporter: after taking canada by storm, it was time to visit california. the duke and duchess invited some friends around to the consul general's house where they were staying. the next day off to a game of polo. the duke was, in his own words, looking forward to letting loose after a busy few days.

his team won. and a proud duchess presented her husband with a trophy and a kiss. on saturday night, they hit the red carpet. the duchess has arrived, and she hasn't disappointed. the dress by alexander mcqueen wowed the hollywood a-listers inside. from the red carpet to squid row. on sunday they went to this house for kids with a deprived neighborhood, the artistic duchess showing her skills. then a war veterans job fair. this is the final stop on this very successful north american royal tour, but in many ways this is the most important stop, particularly for the duke. >> this is the last event on our tour of north america, but to 34i mind it is one of the most seriously most important. this because it's men and women who choose to put their life on the line for their country. they're the frontline of a remarkable relationship between the